Borden gets interim access to cash collateral; final hearing Jan. 23

By Caroline Salls

Pittsburgh, Jan. 10 – Borden Dairy Co. obtained court approval to access the cash collateral of its pre-bankruptcy secured parties on an interim basis, according to an order filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.

The final hearing is scheduled for Jan. 23.

The cash collateral will be used to fund Borden’s operations while in bankruptcy. The interim access is scheduled to expire on Jan. 23.

Specifically, administrative agent, collateral agent and letter-of-credit issuer PNC Bank, NA has an interest in the cash collateral.

As previously reported, PNC objected to the cash collateral use motion.

PNC said Borden was negotiating a consensual out-of-court restructuring before it filed for bankruptcy.

“Without any discussion whatsoever, let alone the courtesy of advance notice to agent, debtors abruptly filed these Chapter 11 cases,” the objection said.

“As a result, agent was deprived of an opportunity to review or comment on the terms of debtors’ proposed usage of cash collateral or any other relief requested in the first-day motions and saw them for the first time approximately 36 hours ago.”

PNC said the first-day motions show that Borden’s hasty bankruptcy filing “is devoid of any exit strategy.”

Despite this, the agent said the motions seek approval to expend significant sums of PNC’s cash collateral within the first several weeks of Borden’s cases to satisfy in excess of $50 million of pre-bankruptcy unsecured claims, while diminishing the value of the agent’s collateral.

Borden is a Dallas-based dairy company. The company filed bankruptcy on Jan. 5 under Chapter 11 case number 20-10010.

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